Greek government on collision course with pharmaceutical companies over innovative drugs

The pharmaceutical companies claim that they are under pressure by the headquarters abroad to stop providing innovative drugs and therapies and warn that patients will likely face a lack of access to specific medicines. [Meghana Kulkarni/Flickr]

Several pharmaceutical companies in Greece have threatened to stop supplying the market with innovative drugs and said they could even withdraw existing drugs as a result of an obligatory “rebate” imposed by the Greek government and applied retroactively.

EURACTIV.com has learnt that pharmaceutical companies based in Greece have contacted the ministry of health to issue a warning about their development of new innovative drugs as well as the future provision of therapies already available on the market.

The reason for this, pharmaceuticals claim, is a measure recently introduced by Athens as part of the bailout deal with its international lenders, hitting the pharma industry with an up to 25% levy on the turnover generated by new patent-protected drugs.

This rebate has been applied to all innovative drugs retroactively from January 2017.

In addition to this, the Greek government decided in May 2017 to impose a 25% market entry fee on new medicines.

The pharmaceutical companies claim that they are under pressure from their headquarters abroad to stop providing innovative drugs and therapies and warn that patients will likely face a lack of access to specific medicines as a result of these measures.

Athens’ decision to claim the European Medicine Agency’s relocation from London sends a message that medicine is “not just a commodity but a social good”, Greece’s Alternate Minister of Foreign Affairs, Georgios Katrougalos, told EURACTIV.com.

No one is ‘forced’

EURACTIV contacted the National Organisation for Healthcare Provision (EOPYY), Greece’s health care insurance system, for a comment. EOPYY sources said that the Ministry of Health had made the decision on the rebate.

The same sources explained that the pharmaceutical companies have two options: either refer to EOPYY’s negotiation committee and work for an improved, mutually-accepted deal to avoid the up to 25% rebate; or pay the 25% on the annual turnover as demanded by the law.

“These measures do not exist only in Greece but in all EU member states.”

“EOPYY does not force any company to bring innovative drugs to the market if it does not want to, […] however EOPYY ensures patients’ access to innovative healthcare when needed,” the sources pointed out.

“In the cases where a doctor decides that a patient needs a medicine that is not on the market, then EOPYY ensures access to it,” the sources emphasised.

Six southern member states have signed a common declaration, aiming to enhance their cooperation and jointly negotiate with the pharmaceutical industry on drug pricing.

The clawback

Greece finds itself in a tricky position on the issue of drugs because of the financial commitments it has taken to save its economy from collapse.

In addition to rebates and as part of the bailout deal, Greece introduced another provision in 2012, the clawback, as a “temporary” mechanism aiming to reduce public spending on hospital healthcare, whose budget has remained stable at €1.9 billion over the last three years.

As the country’s total pharmaceutical expenditure exceeds the budget, pharmaceutical companies are asked to repay the excess.

The logic behind the introduction of this mechanism suggests that the current consumption of prescription drugs is inconsistent with the real medical need. Consequently, the budget overrun must stem from over-prescription of pharmaceutical preparations or other possible shortcomings of the healthcare system.

The clawback calculation is based on the market share as well as the development of each company. This means that if a pharmaceutical company’s sales grow in line with medical demand, then its bill to the state also increases.

Commission’s dual language

EURACTIV has recently contacted the European Commission on the clawback issue. The executive has always defended its pro-public health policies when it comes to austerity measures in countries under bailout programmes.

“The clawback mechanism operating in Greece allows the authorities to control the costs associated with their pharmaceutical reimbursement budget while ensuring that patients continue to have access to the medication they need,” an EU spokesperson said.

“The decision on the type of medicines covered by this mechanism falls under the responsibility of the Greek authorities,” the spokesperson added.

Background

Hit hard by austerity, the health systems of EU member states are under huge pressure. Combined with an aging population and the alarming burden of chronic illnesses, EU member states have targeted specific aspects of the incentives granted to the pharma industry in order to decrease drug prices.